EMBATTLED Swedish company PA Resources is considering its options over the Didon oilfield offshore Tunisia after UK-based EnQuest withdrew from its bid to acquire the permits.
EnQuest signed a deal with PA Resources to acquire a 70 per cent stake in the field and the neigbouring Zarat permit in May 2013, with PA to retain a 30% stake in the offshore permits.
The transaction was mostly wrapped up by July 2014, both companies said, with the parties awaiting a letter of non-objection from the Tunisian Authorities.
That letter never arrived, and the PA and EnQuest deal was reversed on 31 January, a decision that will see an escrowed US$23 million returned to EnQuest, while PA Resources retains its 100% ownership of the Didon concession.
In an announcement, PA Resources said the collapse in world oil prices had meant the Didon oilfield was currently cash flow negative.
“This situation will worsen as wells decline until a campaign of infill drilling can be undertaken, which will require a substantial investment in the field,” the company said.
“PA Resources is currently looking at alternatives for reducing the negative cash flow from Didon, including shutting the field in until oil prices recover.”
The news came after PA Resources was forced to write down the value of its assets by 2.1 billion Swedish krona – a fall which it also attributed to a drop in oil prices.
In its announcement at the time of the write down, in late January, PA said the loss could lead to the equity of company shareholders being less than one-half of the registered share capital.
“As a consequence, the company’s board of directors has resolved to prepare a balance sheet for liquidation purposes,” PA said.
As a consequence, the company said it would share the results of the Didon option planning with the company’s creditors in the context of the current refinancing negotiations.
At the same time, development of the Zarat discovery would proceed, PA said, adding that it would examine alternative ways of funding the development.